Brill close to Inside deal

Publishing executive Steven Brill is closing in fast on a deal with Powerful Media, owners of media-on-media Web site Inside.com and Inside magazine. The deal, not wrapped as of March 30, may be announced as early as today.

"We do not have a comment," an Inside.com spokesman said.

The deal was reported March 29 by AdAge.com.

Mr. Brill and his spokeswoman at deadline had not returned phone calls, nor did Powerful Media executives.

Primedia owns 49% of Brill Media Holdings, and Mr. Brill owns a smaller stake in Media Central. Last month, Primedia CEO Tom Rogers deflected a question about his company's interest in Inside.com by saying "someone will have to convince me that model works."

Privately held Powerful Media burned cash fast. The company in 2000 generated under $2 million in revenue-and lost more than $18 million, according to an executive familiar with the financials. It has around $10 million in cash.

Primedia's stock closed March 30 at $6.30, after hitting a 52-week low March 29. That's not great news for full-timers at Powerful Media, all of whom have equity, and could see that convert to Primedia stock. The expected deal between Mr. Brill, Primedia and Powerful Media-with the acquisition being shared by Brill Media Holdings and Primedia's Media Central-is almost exclusively equity based.

Full-time staffers at Inside.com and Inside-which launched late last year-total around 90.

While the contours of the deal were uncertain at deadline, it's expected that Brill's Content will change its name-although not to Brill's Inside Content, as a report contended last week. Inside.com will remain online, and while a form of Inside will live on, it likely will not be under that name.

Layoffs are expected, and some suggest the potential deal marks the end of Inside.com in its current personnel-heavy form. Confusing matters somewhat is that layoffs are expected at Brill's Content as well.

"God only knows what it will end up as," said an insider familiar with Powerful Media, reflecting on the news. "I don't know if anyone has any great hopes for that. At least it's not going under."

Some Inside-rs will be offered positions at Media Central's trade titles, which include Cable World, Folio: and Book Publishing Report. Founders Michael Hirschorn and Kurt Andersen will stay on with the new entity. CEO Deanna Brown will take a short-term, high-priced consulting role.

"Kurt [Andersen] suggested someone might use [Inside.com] as a heart to pump traffic through the rest of a larger media play," said one staffer, but allowed, "It's a very expensive model of content creation for Primedia."

Inside.com's editorial plaudits did not translate into ad dollars or paid subscriptions-the latter being the hobgoblin of content plays on the Web. Originally the site charged users $19.95 monthly for full access. On March 29, a "time-sensitive offer" touting a year's worth of Inside.com and Inside for $69.95 hit e-mail in-boxes.

"If you took a poll in the office today about whether anyone regretted coming to work here, I don't think they'd say they did," said an Inside staffer March 29. "But that could change."